Japan Was Worst Performing Stock Market In '96: Study

The latest Morgan Stanley research report has mentioned Japan as the worst performing developed stock market in 1996. Japan, it seems, is continuing its dismal performance in 1997.

The Morgan Stanley Capital International (MSCI) Japan Index lost 10.9 per cent in January - the weakest performance by any market, whether developed or emerging in the last month. Mounting concerns about the health of the nation's banks, particularly their vulnerability to non-performing real estate loans was the reason, the report says.

The MSCI Japan Banking Index declined 22.6 per cent as the industry received two shocks.

Mitsubishi Trust & Banking, considered one of Japan's stronger trust banks, sharply cut its profits forecast for the current fiscal year.

 

Also, Moody's Investor Service downgraded the credit rating outlook for four medium-sized banks to negative from stable, citing the government's increasing reluctance to bail out distressed leaders.

Other factors contributing to the general sell-off in Japan include estimates of a weak economy for the fiscal year beginning in April 1997.